Matthew Whitaker was previous Jeff Sessions' chief of staff. Sessions submitted his resignation on Wednesday, one day after the 2018 midterm elections.
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Acting United States Attorney General Matt Whitaker, center, and Labor Secretary Alex Acosta, right, attend a wreath laying ceremony at the Tomb of the Unknown Soldier during a ceremony at Arlington National Cemetery on Veterans Day, Nov. 11, 2018 in Arlington, Va.(Photo: Andrew Harnik, AP)

While in private business, acting Attorney General Matthew Whitaker walked away from a taxpayer-subsidized apartment-rehabilitation project in Des Moines after years of cost overruns, delays and other problems, public records show.

The city of Des Moines ultimately yanked an affordable housing loan that Whitaker's company had been awarded, and another lender began foreclosure proceedings after Whitaker defaulted on a separate loan for nearly $700,000. Several contractors complained they were not paid, and a process server for one could not even find Whitaker or his company to serve him with a lawsuit.

Whitaker is expected to return to his home state Wednesday to speak at a conference at a downtown Des Moines hotel, about two miles from the Ingersoll Avenue apartment building that he once saw as an investment opportunity. After years of rising costs, Whitaker stopped work on the project by early 2016 and sold the building months later.

"He did not complete the project due to cost overruns and a bad general contractor," Department of Justice spokeswoman Kerri Kupec said late Tuesday.

Matt Whitaker is pictured in this undated file photo provided by the University of Iowa. Whitaker played tight end at The University of Iowa from 1988-1992. On Wednesday, Nov. 7, 2018, Whitaker was named acting Attorney General after Attorney General Jeff Sessions resigned. University of Iowa Athletic Communications via USA TODAY

Matt Whitaker is pictured in this 1991 file photo provided by the University of Iowa. Whitaker played tight end for the Hawkeyes from 1988-1992. On Wednesday, Nov. 7, 2018, Whitaker was named acting Attorney General after Attorney General Jeff Sessions resigned. University of Iowa Athletic Communications via USA TODAY

From May 2014: Matt Whitaker, one of five candidates vying for the Republican nomination for U.S. Senate, talks with guests before The Robb Kelley Spring Dinner at the Downtown Marriott Hotel in Des Moines. Register file photo

From September 2009: Former Iowa Hawkeyes tight end Matt Whitaker (left), now a U.S. Attorney for the Southern District of Iowa, playfully tries to take the football away from former Iowa State quarterback John Quinn, who is the Director of the division of criminal investigations in Iowa. Register file photo

The headline from the December 1987 Des Moines Register reads: "Ankeny prep says he'll join the Hawkeyes." That's Ankeny High School multi-sport star Matt Whitaker, who chose to play football at the collegiate level at UI. Register file photo

From October 1992: Anthony Dean is congratulated by teammate Matt Whitaker (46) after Dean caught a pass from Iowa quarterback Jim Hartlieb for a 2-point conversation — the winning points — in the fourth quarter of the Hawkeyes' 23-22 victory against Wisconsin. Register file photo

From September 1992: This photo ran with a story in the Des Moines Register sports pages featuring Iowa Hawkeyes tight end Matt Whitaker, who was playing football while going to law school. Register file photo

From November 2013: Republican U.S. Senate candidate Matt Whitaker speaks to potential voters during an event at the Christian Union Church in Indianola. The event featured five candidates seeking the GOP nomination. Michael Rolands/Indianold Record-Herald

From September 2009: Former Iowa Hawkeyes tight end Matt Whitaker (left), now a U.S. Attorney for the southern district of Iowa, and former Iowa State quarterback John Quinn, now the Director of the division of criminal investigations in Iowa, pose for a photo in Whitaker's office. Register file photo

From September 2009: Former Iowa Hawkeyes tight end Matt Whitaker (left), now a U.S. Attorney for the southern district of Iowa, and former Iowa State quarterback John Quinn, now the Director of the division of criminal investigations in Iowa, pose for a photo in Whitaker's office. Register file photo

Acting Attorney General Matt Whitaker speaks to Iowa county attorneys and local law enforcement on Wednesday, Nov. 14, 2018, at the U.S. Attorney's Office in Des Moines. Whitaker, an Iowa native, was appointed interim attorney general by President Trump to replace Jeff Sessions. Kelsey Kremer/The Register

Acting Attorney General Matt Whitaker speaks to Iowa county attorneys and local law enforcement on Wednesday, Nov. 14, 2018, at the U.S. Attorney's Office in Des Moines. Whitaker, an Iowa native, was appointed interim attorney general by President Trump to replace Jeff Sessions. Kelsey Kremer/The Register

City officials raced to see the project completed to avoid losing federal money, and contractors filed liens seeking compensation for more than $32,000 in unpaid work.

A company formed by Whitaker and two partners, MEM Investment, was awarded a $166,000 city loan to renovate the vacant three-story complex in 2012, through a Department of Housing and Urban Development grant program to promote affordable housing. A reorganization in 2014 made Whitaker the company's sole owner.

All but $25,000 of the loan would be forgiven as long as the project was completed by 2017 and half of its 22 units were restricted to low-income tenants for five years. But what was once thought to be a $400,000 project for lead testing and site improvements became more expensive as additional work and damage piled up, records show.

Whitaker refinanced his mortgage on the building to get more funding and put an undisclosed amount of his own money into the project.

Beginning in February 2015, city officials said they repeatedly communicated the urgency of finishing the project to Whitaker during meetings, letters and phone calls. But by March 2016, an inspection showed "there had been minimal, if any, additional rehabilitation work completed since the previous inspection" several months earlier, city planner Mary Neiderbach wrote to Whitaker on April 1, 2016.

"In addition, more damage had occurred to the building's interior because of what appears to be a roof leak and missing downspouts on the back of the building," she wrote, adding that Whitaker's company "appears to have abandoned the property."

The letter informed Whitaker that the city was terminating the loan agreement and gave him 30 days to pay back $151,620 that he had been advanced. It noted that the city had to complete the work by the end of 2016 or repay HUD, and that it did not have confidence Whitaker's company was up to that task.

Whitaker did not reply to the city's notice. His lender, Lincoln Savings Bank, soon declared Whitaker's company in default after he ignored demands to pay back a mortgage that had ballooned to $687,000, records show. The bank initiated foreclosure proceedings on the property in July 2016, seeking to be paid back ahead of the city and contractors.

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The contractors included an electrician who filed a lawsuit seeking to collect more than $14,000 in unpaid invoices. A process server said in a court filing that repeated visits to three addresses listed for Whitaker's company and his law firm turned up nothing other than dark, locked offices. The lawsuit was eventually dismissed after both Whitaker and the contractor failed to show up to a scheduled court hearing that had been announced in the newspaper.

As part of an exit agreement, Whitaker's company agreed to sell the building to developer Jeff Young, to "provide a portion of the Lincoln Savings Bank repayment and to settle all contractor liens against the property," an August 2016 city memo showed. It's unclear whether the contractors have been repaid in full.

The memo said Young was expected to complete the project by the looming December 2016 HUD deadline.

Kupec said the buyer also assumed Whitaker's loan, and the city didn't take any legal action.

Attorney Jeff Courter, who represented Lincoln Savings Bank, said its foreclosure petition had been resolved but declined to comment further.

Whitaker's company did add value to the building, which it bought for $200,000 in 2012 and sold for $650,000 four years later.